by Steve Barber, Galvin Electricity Initiative
When Austin Energy became the first in its industry to pursue a certified quality management system in 2006, several unknowns existed.
Could it be done in 14 months? Would suppliers and staff recognize and respond to a new way of doing business? Would the investment improve the quality and reliability that its high-tech customers expected?
Yes, but the longer answer explains how one of the nation’s top 10 largest community-owned electric utilities serves as an example to the entire energy industry.
Austin—Ready for Quality Improvement
For companies that depend on exceptional power reliability, even small disturbances cause millions of dollars in scrapped product.
Austin, Texas, is home to a high concentration of semiconductor manufacturers, an industry particularly vulnerable to electricity outages and perturbations. In 2006, Austin Energy’s electric service delivery (ESD) organization worked with local industrial customers to develop a plan for the design and implementation of a comprehensive quality management system (QMS) and certification to ISO 9001, an internationally recognized set of standards.
It was agreed that the system would be in place within 14 months. As the first utility in the industry to pursue ISO 9001 certification, Austin Energy had to set a precedent.
Leading the Way
As senior vice president of the ESD group, Cheryl Mele was the executive sponsor of the project and is a self-proclaimed optimist.
“I usually see more capability in people than they might see in themselves,” Mele said. “I know if we just keep moving on, it will work out.”
Others at Austin Energy did not share Mele’s optimism. David Wood, director of system operations and reliability, saw human and technical challenges.
“I was a tough sell,” Wood said. “I felt like we were at the foot of a high mountain, and I couldn’t even see the peak through the clouds.”
His opinion changed after he saw how Mele’s changes would lead long-term success and benefits for Austin Energy.
Mele won over Wood and other converts because her approach was grounded in firm leadership and discipline. She chose a small, specialized, internal organization to lead the project.
This corporate consulting group developed a project management methodology and certification program to ensure effective project management and communication throughout the company. While developing this process, the group also gained the capability to oversee several successful projects themselves.
In many companies, QMS certification is a wandering evolution, shifting in priority and direction, and taking years to complete. Understanding the pitfalls, the corporate consulting group implemented a few components to its approach:
- An end date was selected and widely communicated to the internal leadership.
- The end date was communicated to external customers, providing additional pressure and motivation.
- Tangible, incremental milestones illustrated progress to support teams.
- A detailed schedule was developed that factored in possible risks, obstacles and constraints.
Design leaders took a phased approach that allowed them to communicate success for small victories and to implement parts of the system that would be useful immediately.
Phase 1: Process Capture and Organization. The project’s first goal was to capture institutional knowledge and develop process repeatability within the organization. Activities within this first phase included:
- Selecting software to provide the backbone of the quality management system,
- Creating a category tree database structure specifically mirroring the organization to ensure that information is understood easily and accessible,
- Capturing all ESD group processes and mapping them to the category tree, and
- Creating a folder containing work flows, forms and documentation for each process.
Design leaders clarified that this stage focused on capturing processes as the teams currently operated.
Phase 2: Corrective Action Process. The focus on capturing, rather than perfecting, current processes enabled the ESD group to form an information base quickly.
To drive improvements to the captured processes, design leaders instituted a system that made it easy for any employee to identify a process defect and request corrective action:
- A formal, corrective action form required a problem description and listed the responsible functional area.
- The responsible group would define root cause, corrective actions, correct affected procedures and identify actions that might affect other processes or work groups.
- An executive summary and status of open corrective actions enabled management oversight.
- The system allowed the functional area supervisor to verify and approve the corrective action.
For example, groups reported that work flows became more efficient as miscommunications between functions were identified and captured. This process created a bottom-up approach to evolving procedures.
Phase 3: Performance Metrics. For the team to measure improvements on the organization’s goals, performance metrics and targets were created: quality of power delivery, cost control and customer and employee satisfaction.
Quality metrics reflected improvements in outage frequency and duration, as well as in their transmission line system performance.
Industry standard metrics indentified the average number of interruptions per customer (System Average Interruption Frequency Index or SAIFI) and the average number of minutes without power (System Average Interruption Duration Index or SAIDI).
Austin Energy and its customers developed a custom metric to measure transmission line performance.
Without knowing other utilities’ performance, however, it was impossible for the ESD group to assign meaningful targets. Austin Energy worked with a consulting service offering utility-focused benchmarking.
Their cost and quality benchmark data continues to help Austin Energy create performance metric goals and targets.
Phase 4: Line-of-Sight Measurements. With the introduction of high-level performance metrics, managers and customers could view, discuss and give feedback on Austin Energy’s performance. Even so, some employees did not understand fully how their actions affected the company’s top-level performance.
The organization created a line-of-sight map illustrating relationships between individual activities and top-level metrics.
Just as corrective action tools created a bottom-up process, connecting corporate performance to individual goals ensured top-down alignment.
The complex interdependency among the many relevant activities made this mapping exceptionally difficult. As with the benchmarking activity, a consultant assisted.
Now, the ESD organization has a working map for assigning goals to each team member. It’s an ongoing project.
Phase 5: Training. The ISO 9001 certification mandates that a training system ensures proper employee education. Austin Energy established a system focused on two areas: ISO 9001 awareness and job-focused training.
For job-focused training, an associated supervisor creates a course list. As employees are assigned subfunctions related to their positions, the course list automatically uploads to their required course lists. The system then reports each employee’s completion of individual classes.
Austin Energy achieved ISO 9001 certification within 14 months. In the first year, Austin Energy experienced significant reliability improvement: SAIFI was reduced from 1.01 to 0.61; SAIDI was cut in half, from 92 to 45; and the customer transmission performance indices show more than a 50 percent improvement.
Extreme drought led to a decrease in storm-related outages. Fewer human errors also proved fundamental to their reliability improvement.
Key Success Factors
Austin Energy’s ability to procure certification in this short time depended on its approach, consistent leadership and goals. A few components stood out as critical to success:
- Mele provided strong leadership.
- The corporate consulting group became well-versed in the organizational structure and project management practices of the ESD group. This resulted in two important outcomes:
- The QMS tools and dashboards reflected the organization and its operational processes. This increased the likelihood that the framework would become part of the operation rather than used to pass the audit.
- The disciplined approach of project scheduling and risk management led to the project’s completion within 14 months.
- The schedule was designed around specific, interim milestones that were communicated to the organization. This helped raise participant awareness of the project’s progress.
- In the initial collection of processes, focus was limited to current work flow, forms and documentation, avoiding the complication and burden of trying to improve processes at that time.
Current metrics indicate high reliability compared with its peers, but Austin Energy strives to improve its system.
It is developing better mid- and low-level metrics for managers and individual contributors, as well as tools to increase the system’s automation and efficiency. The company also anticipates improvement in operations costs.
Based on results in the ESD unit, Austin Energy plans to roll out similar systems in other areas of the company.
Steve Barber is a member of the Galvin Electricity Initiative who serves as strategic quality advisor to the utility industry. He has a master’s degree in electrical engineering from Binghampton University State University of New York and developed his expertise in quality and process management as managing director of a global automotive electronics business for Continental AG. He is a member of IEEE.